TG Therapeutics (TGTX): Profit Margin Drops to 13.3%, Challenging Premium Growth Narrative

TG Therapeutics (TGTX) reported a net profit margin of 13.3%, marking a drop from 27.6% in the previous year. The company’s Price-To-Earnings Ratio is 81.3x, running higher than both its biotech peer average of 57.3x and the broader US biotech industry’s 17.7x. With five-year annual earnings growth averaging 48.3% and further yearly earnings gains of 35.8% projected, TG Therapeutics is outgrowing the US market’s expected 16.1% pace, and revenue is forecast to climb 27% per year versus the market average of 10.5%. Investors are facing a story of strong long-term growth potential, but also high valuation multiples and some pressure from shrinking profit margins.

See our full analysis for TG Therapeutics.

The next section puts these earnings in context, sizing them up against the key Simply Wall St narratives and examining where expectations match up and where the numbers raise new questions.

See what the community is saying about TG Therapeutics

Profit Margin Projected to Triple by 2028

• Analysts expect net profit margins to rise from the current 13.3% to 38.1% in three years, nearly tripling profitability if projections hold.
• Analysts' consensus view sees this expanding margin as tied to two drivers:
  • Commercial execution is delivering higher repeat prescribing and patient uptake. The consensus suggests this could make margin improvement durable even as competition heats up.
  • However, there is wide analyst disagreement, with the most optimistic seeing $525 million in earnings by 2028 and the lowest only $276.6 million, showing that not everyone believes profit expansion is locked in.
• For a deeper look at how analysts' forecasts shape the full story, read the consensus narrative next. 📊 Read the full TG Therapeutics Consensus Narrative.

Bulls Bet on Revenue Acceleration

• Revenue is forecast to grow 39.5% per year over the next three years, far outpacing the US biotech industry's average of 10.5% annual growth.
• Consensus narrative notes that bullish investors are wagering on:
  • Upcoming catalysts like the launch of subcutaneous BRIUMVI, which could unlock access to 35 to 40% of the anti-CD20 MS market currently dominated by self-administered treatments.
  • Strong commercial execution and increased healthcare coverage, both seen as likely to drive further sales and patient penetration and support growing topline revenue through 2028.

Premium Valuation versus Peers, Yet DCF Implies Deep Discount

• TG Therapeutics trades at a price-to-earnings ratio of 81.3x, well above the biotech peer average of 57.3x and the wider US industry’s 17.7x. However, its current share price of $33.69 is 75% below the DCF fair value of $136.40.
• Analysts' consensus view highlights the valuation tension:
  • The current market price sits roughly 21% below the latest analyst price target of $44.00, suggesting some think the premium is justified by rapid growth and future margin expansion.
  • Still, the company would need to grow earnings to $469.0 million by 2028 and maintain market leadership for current multiples to make sense, according to analysts.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for TG Therapeutics on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your TG Therapeutics research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

Explore Alternatives

Despite strong growth, TG Therapeutics faces skepticism about its lofty valuation. The share price remains far above peers, justified only by ambitious earnings targets.

If paying up for a premium story gives you pause, compare with these 839 undervalued stocks based on cash flows that offer attractive value based on discounted cash flows and reasonable market expectations.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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